Firm may take over city audit duties

STOCKTON - The city on Tuesday may replace its former auditor, who retired last year in the wake of Stockton's bankruptcy filing, with a large accounting firm.

Scott Smith

STOCKTON - The city on Tuesday may replace its former auditor, who retired last year in the wake of Stockton's bankruptcy filing, with a large accounting firm.

City Manager Bob Deis is expected to recommend that City Council members bring in Moss Adams LLP to perform an internal controls risk assessment and serve on a short-term basis as the city's auditor.

If council members are happy with the Seattle-based firm, Deis suggests they extend the contract. There is little doubt that the city is due for a risk assessment and internal controls audit, Deis says in a staff report prepared in advance of Tuesday's council meeting.

"It increases the chance that the mistakes of the past will not happen again," Deis said.

The use of a firm marks a change in approach to employing its own auditor. City voters in 1994 created the City Auditor's office through a city charter amendment, installing an auditor who answered directly to the City Council and its audit committee.

F. Michael Taylor founded the office and held the seat for the next 18 years.

When he left with mixed reviews, the City Council sought a different strategy to performing internal audits.

The City Auditor's Office is autonomous from the city manager, city attorney or city clerk, the other positions appointed directly by the council.

City Attorney John Luebberke last year gave the opinion that contracting with an outside accounting firm complies with the city charter. Moss Adams, if hired, will also answer to the council, Deis said in his staff report.

The city announced a search for an audit firm, and Deis recommended Moss Adams, headquartered in Seattle with 22 offices in Washington, Oregon, California, Arizona, New Mexico, and Kansas, and one in Stockton.

The cost of contracting with Moss Adams for the risk assessment and six months of serving as city auditor will total $98,400, which is cheaper than hiring a replacement.

Taylor earned about $123,000 annually, and he had an office staff of three full time employees.